Peregrine Will Restate Results; SEC Investigating
Software maker Peregrine Systems Inc. said Thursday that it would restate nearly three years of results and disclosed that federal regulators have launched a formal probe of its accounting practices.
San Diego-based Peregrine, whose software enables companies to track physical assets, also said it may cut more of its work force and will study financing alternatives.
The announcement came less than two weeks after the company said its audit committee would investigate whether it had failed to adjust revenue from software deals made through partners, consultants and retailers if a product was returned.
Such indirect sales account for about 40% of Peregrine’s revenue.
“This is a logical sort of extension of the announcement they had a couple of weeks ago,” CIBC World Markets Corp. analyst Brad Reback said.
“I don’t think they’ll go bankrupt. They clearly will be a much smaller company when this is all done.”
However, Pacific Crest Securities analyst Brendan Barnicle said the company may be running out of cash. Peregrine cut 450 jobs in February, leaving it with 3,500 employees.
The company said it would restate results for fiscal 2000, fiscal 2001 and the first three quarters of fiscal 2002 to correct inaccurate accounting of as much as $100 million in revenue. It said it intends to cooperate fully with a Securities and Exchange Commission investigation into its accounting practices.
Peregrine shares rose 6 cents, to $1.59 on Nasdaq. The stock was above $80 in 2000 and was as high as $33.55 in the last year.
On April 6, Peregrine announced the resignations of Chairman and Chief Executive Steve Gardner and Chief Financial Officer Matt Gless and said it might have to restate results.
The news drove its shares down more than 60% to below $1.
Peregrine’s new auditor, KPMG, which replaced Arthur Andersen, brought the accounting problems to the board’s attention.
Last month, Peregrine delayed reporting results for the fourth quarter of fiscal 2002, citing the auditor change.
